Are you at risk of losing your job? Companies are still downsizing and for many people layoffs are imminent. If your job is at risk, either through termination or layoff, there are several things you can do to prepare yourself financially for being temporarily unemployed.
Devise a plan to search for a new job. Update your resume and create a list of potential employment contacts. Speak to anyone you would like to list as a reference; explain to them that you will be seeking new employment soon and ask if they would be willing to be a reference for you.
Cut any unnecessary expenses until you know how much money you will have every month and what you will be able to afford. Be creative; you might find some things you can temporarily do without.
Try to live on 75% of your current income. Pay off any debt as quickly as possible and bank the rest. Youll want to have a cushion in your bank account if you dont find another job right away and having less outstanding debt will make it easier to meet your monthly financial obligations.
Look ahead for large expenses that could arise within the next year, such as medical issues, home projects or vehicle repair. Part of what youre saving can be earmarked for these items.
Make any required medical, dental or vision appointments while youre still employed and have insurance and can afford the patient responsibility portion of the medical bills.
Perform a larger share of the household chores so that your partner can work longer hours and earn more income, if that option is possible.
Plan inexpensive but fun outings, even if you can save up only a few dollars a week toward the expense. Being unemployed can be stressful and youll need some fun activities to look forward to once in a while during the job hunting process.
Preparing for a job loss can be stressful, but with some careful planning and thoughtful financial choices, the impact to your household can be more manageable.